5 Smart Super Strategies to Save Tax Before June 30

Did you know there are many superannuation strategies that can cut your tax bill? They aren't just for the wealthy or those nearing retirement; these powerful tools can suit a wide range of incomes and ages.

As we approach the end of the 2025 financial year, it's the perfect time to take action. This guide will walk you through five powerful superannuation strategies to help you legally reduce your tax bill in FY25.

1. How can salary sacrificing reduce my tax?

Salary sacrificing is an arrangement you make with your employer for them to direct a portion of your pre-tax salary straight into your superannuation account. This is a popular strategy because it simultaneously reduces your taxable income and boosts your super in a highly tax-effective way.

Example:

John has a taxable income of $100,000. At his marginal tax rate, he would normally pay $22,788 in tax. If John decides to salary sacrifice $10,000 into his super:

• His taxable income drops to $90,000, reducing his personal income tax bill by $3,200.
• The $10,000 contribution is taxed at just 15% inside his super fund ($1,500).
• Overall Tax Saving: John saves $1,700 in total tax and adds $8,500 to his super balance.

The main limitation is that not all employers offer this, and with the financial year ending soon, you might not have enough time to sacrifice the full amount you want. This brings us to a more flexible alternative.

2. What is a personal deductible contribution?

This strategy offers the same tax benefits as salary sacrificing but gives you complete control. Instead of involving your employer, you simply:

1. Transfer funds from your bank account directly into your super.
2. Submit a "Notice of Intent to Claim a Tax Deduction" to your super fund.
3. Receive an acknowledgement from your fund.

If you are aged between 18 and 67, you are automatically eligible to use this strategy. It's a fantastic way to make a last-minute contribution before the end of the financial year.

A Key Rule to Remember: The Concessional Contribution Cap

Strategies 1, 2, and 3 all involve concessional contributions. This is money that goes into your super from your pre-tax income. There is a limit, or "cap," on how much you can contribute this way each year.

• For the 2025 financial year, the general concessional contribution cap is $30,000.
• This cap includes your employer's Super Guarantee payments, salary sacrifice, and any personal deductible contributions you make.
• This cap will remain at $30,000 for the 2026 financial year.

However, this is just the general cap. You might actually be able to contribute much more.

3. How can I use the carry-forward rule for a 'catch-up' contribution?

This powerful strategy allows you to use any unused concessional contribution cap amounts from the last five financial years.

• The Rule: If your total super balance was less than $500,000 on the 30th of June of the previous financial year, you can carry forward your unused caps.
• In FY25, an eligible person can use any unused cap space from FY20 all the way through to FY24.
• This means you could potentially contribute up to $162,500 and claim it all as a tax deduction in a single year.
• Important: Any unused cap from the 2019/20 financial year will expire on the 30th of June 2025. This is your last chance to use it before it's gone for good.

This strategy is incredibly useful for someone who has a one-off high-income event, such as selling an investment property.

Example:

Dennis, 60, sells an investment property and makes a taxable capital gain of $185,075. His tax bill on this would be $44,713.

• Since his super balance was below $500,000 and he hasn't contributed for five years, he can use the carry-forward rule to make a personal deductible contribution of $162,500.
• This reduces his taxable income to just $22,575, which is below the effective tax-free threshold.
• His personal income tax bill drops to zero.
• He pays the 15% contributions tax inside super ($24,375).
• Overall Tax Saving: Dennis saves $20,338 in tax.

You can check your unused cap amounts and your total super balance through your MyGov ATO service.

4. How can I get a tax offset for spouse contributions?

This strategy allows one partner to add money to their spouse's super account, boosting their retirement savings while giving the contributing partner a tax offset.

• The maximum tax offset you can receive is $540.
• To get the full offset, your spouse's income must be less than $37,000, and you must contribute at least $3,000 of your after-tax money to their super.
• The tax benefit gradually decreases and cuts off completely once your spouse's income reaches $40,000.

If one partner in a couple earns less than $40,000, this strategy is well worth looking into.

5. How can I get the government co-contribution?

This isn't a tax saving, but it's like getting free money for your super from the government.

• How it works: If you make an after-tax (non-concessional) contribution to your super, the government may match it with a co-contribution, up to a maximum of $500.
• For FY25: To get the maximum $500 co-contribution, you need to contribute $1,000 of your own after-tax money, and your total income must be under $45,400.
• The government matches your contribution at a rate of 50 cents for every dollar.
• The co-contribution amount gradually decreases as your income rises and cuts off completely once your income reaches $60,400.
• A Key Test: To be eligible, at least 10% of your total income must come from employment or business activities, not just passive investments.

You can use the super co-contribution calculator on the ATO website to estimate your entitlement.